Agenda and draft minutes

Please note items 12 and 13 added to 'Agenda Supplement 2' published on 11th September 2024, Governance and Audit Committee - Thursday, 12th September, 2024 6.30 pm

Venue: Meeting Room 1, Council Offices, Priory Road, Spalding

Contact: Democratic Services  01775 764693

Items
No. Item

29.

Declaration of Interests

(Where a Councillor has a Disclosable Pecuniary Interest the Councillor must declare the interest to the meeting and leave the room without participating in any discussion or making a statement on the item, except where a Councillor is permitted to remain as a result of a grant of dispensation).

 

Minutes:

There were none.

30.

Minutes pdf icon PDF 175 KB

To sign as a correct record the minutes of the following meetings:

Additional documents:

Minutes:

AGREED:

 

That minutes of the following meetings be signed by the Chairman as a correct record:

 

a)    Governance and Audit Committee 13 June 2024; and

 

b)    Governance and Audit Committee 18 July 2024.

 

 

31.

Actions pdf icon PDF 116 KB

Additional documents:

Minutes:

AGREED:

 

That the following be noted:

 

a)    Update on actions which arose at the 13 June 2024 Governance and Audit Committee meeting and the tracking of outstanding actions; and

 

b)    Update on the action plan which arose from the Governance and Audit Committee self-assessment exercise undertaken in early 2024.

 

32.

Q1 Risk Report 2024/2025 pdf icon PDF 256 KB

To provide an update on the Council’s current strategic risks (report of the Assistant Director – Governance enclosed).

Additional documents:

Minutes:

Consideration was given to the report of the Assistant Director – Governance which provided the Governance and Audit Committee with an update on the Council’s current strategic risks.

 

The Business Intelligence and Change Manager introduced the report which detailed the following:

·       An overview of the key risks to which the council was exposed;

·       The action taking place to mitigate identified risks;

·       An updated assessment of the likelihood and impact of those risks;

·       The SHDC Strategic Register was at Appendix A;

·       The SHDC HRA (Housing Revenue Account) Risk Register was at Appendix B; and

·       The Partnership Risk Register was at Appendix C.

 

Members considered the report and made the following comments:

 

  • Members asked for the Risk Register to be formatted in such a way to be readable, or that a large copy be circulated in advance of the meeting.  Members suggested that the register outline controllable risks which included actions for improvements against target dates.
    • The Business Intelligence and Change Manager responded that:
      • Feedback from members was welcomed regarding the streamlining of content columns so that a concise and readable document could be produced;
      • An action list would be considered as part of a reformatting exercise; and
      • In the interim period, a larger version of the report could be made available for members in advance of the meeting and any changes circulated by email ahead of the meeting.
    • The Assistant Director – Governance added that a Risk Scoring Matrix could be utilised to present some elements of information in an infographic format. Members welcomed this approach and which would be developed for the next meeting.

 

  • Members asked whether mitigations were in place for areas with high risk scorings.
    • The Business Intelligence and Change Manager responded that high risk areas were assessed to ensure that they were either treated or tolerated.  Risks associated with a significant impact, such as an IT breach, remained high but due to the level of mitigations in place were deemed to be tolerated.

 

  • Members acknowledged the praise for the Housing Team from the recent Peer review and also the potential risk relating to the recent requirement for Housing Team members to achieve required qualifications to fulfil their roles.

 

  • Members were satisfied with SHDC’s protection/payback approach of nationally recognised qualification fees should an officer leave their employment within a specific period.

 

  • Members noted the appointment of the new Economic Director and looked forward to updates relating to risk in this service area.

 

  • Members requested details comparing missed waste collection data with data before the route changes.

 

  • Members noted that the report reflected a high level of engagement from the Assets and Finance Portfolio Holders and management, which was welcomed.

 

  • Members acknowledged the risk of recruitment for some areas, in particular Finance and Planning, however the new S&ELCP Academy was to be welcomed. Members requested sight of the S&ELCP Academy timeline or business plan if this was available.

 


AGREED:

 

That the covering report and appendices, which detailed the latest assessment of the council’s risk at a strategic  ...  view the full minutes text for item 32.

33.

Q1 Treasury Report 2024/2025 pdf icon PDF 220 KB

To provide members with an update on Treasury Management performance and activity to ensure best practice is maintained (report of the Deputy Chief Executive – Corporate Development (S151) enclosed).

Additional documents:

Minutes:

Consideration was given to the report of the Deputy Chief Executive – Corporate Development (S151) which provided members with an update on Treasury Management performance and activity which ensured best practice was maintained.

 

The Interim Treasury Manager introduced the report and appendix which provided an update on the following areas:

  • Economic update (commentary provided by Link Group);
  • Interest rate forecasts;
  • Annual Investment Strategy;
  • Borrowing;
  • Debt rescheduling;
  • Net Treasury Position; and
  • Compliance with Treasury and Prudential indicators;

 

Members considered the report and made the following comments:

 

  • Members welcomed the well-written report.

 

  • Members stated that the £67,456m HRA debt detrimentally impacted rent demands.

 

  • Members referred to the General Fund Capital Expenditure 2024/25 (Appendix A1) and queried the differential in forecast outturn to approved budget, and changes to approved budgets, relating to the following items: Disabled Facilities Grants; Asset and Property Castle Sports; Asset and Property Moulton Park and New Sheep Market.
    • The Interim Treasury Manager (PSPS) responded that the query related to the Capital Programme and Expenditure, detailed information of which would be included within the upcoming Cabinet report and available within the published agenda of the Cabinet meeting.

 

  • Members noted that the lending of funds to external councils was secure, effectively underwritten by national government, and that due diligence would have taken place in such circumstances.

 

AGREED:

 

Following the Governance and Audit Committee’s receipt and review of the Q1 Treasury Report, that the contents of the report at Appendix A be noted.

 

34.

Internal Audit Progress Report - March to 31 August 2024 pdf icon PDF 449 KB

To provide the Committee with an update of Internal Audit activity (report of the Head of Internal Audit – Lincolnshire County Council enclosed).

Minutes:

Consideration was given to the report of the Head of Internal Audit which provided the Governance and Audit Committee with a summary of internal audit activity during the municipal year to the end of August 2024. 

 

The Head of Internal Audit introduced the report which included the following main areas:

  • The role of internal audit;
  • The purpose of the report;
  • Performance dashboard;
  • Update on internal audit activity - completion of the audit plan was on track;
  • Analysis of audit reviews;
  • Executive summaries of assurance opinions which included a highly positive follow-up review of the Procurement Card audit;
  • Planning and resourcing;
  • Work Plan 2024/25; and
  • Overdue medium and low priority actions:
    • The Interim Treasury and Investment Manager provided the following verbal update on behalf of the Finance Team (PSPS) regarding the two outstanding actions:
      • Finance Staff (Budget Training): the training scheduled for 21 May 2024 was cancelled by the external provider and rescheduled training took place on 14 August 2024. This action was therefore considered ‘complete’; and
      • Budget Managers (Budget Training): the 2025/26 budget guidance and timetable were currently being drafted and during this process budget manager training was to be delivered with a revised implementation date of 31 October 2024.

 

Members considered the report and made the following comments:

 

  • Members queried the implications of internal audit staff turnover noted at page 7 of the report.
    • The Internal Audit Manager stated that the update reflected usual staff turnover within the sector however members could be assured that the internal audit team was fully resourced.

 

  • A member indicated a challenge in understanding a single specific aspect of the report and requested that future iterations be written in plain English.

 

  • Members welcomed the positive results from the Procurement Card follow-up audit.

 

AGREED:

 

That the Internal Audit Progress Report be noted.

 

 

35.

External Audit Progress Report 2023/2024

The External Audit Manager (KPMG) to provide a verbal update of External Audit activity.

Minutes:

Consideration was given to the verbal update of the External Audit Manager (KPMG) regarding the External Audit Progress Report 2023/24.

 

The External Audit Manager attended virtually and updated the committee on the following:

  • That the final external audit had commenced on 9 September 2024; and
  • That KPMG had notified the National Audit Office that audited financial returns for 2023/2024 would not be submitted by the 13 September 2024 deadline and rather that the 2023/24 audit was expected to be completed by the 2023/24 backstop date of February 2025, as agreed with SHDC management. This action remained subject to the 2022/23 financial statements being disclaimed by Ernst Young, by the 2022/23 backstop date of 13 December 2024.

Members considered the verbal update and made the following comments:

 

  • Members queried the proposed increased external audit fees of 9.5 per cent.
    • The External Audit Manager would refer the query to the External Audit Director for a response after the meeting.

 

  • Members noted positive comments from the Peer Review in respect of completion of accounts and audit processes.

 

AGREED:

 

That the external audit verbal update from KPMG be noted.

 

 

36.

Governance and Audit Annual Report 2023/2024 pdf icon PDF 120 KB

To note the Governance and Audit Annual Report 2023/2024 prior to its presentation at Council (report of the Assistant Director – Governance enclosed).

Additional documents:

Minutes:

 

Consideration was given to the report of the Assistant Director – Governance which asked members to note the Governance and Audit Annual Report 2023/2024 prior to its presentation at Council.

 

The Democratic Services Officer introduced the report by stating that the council’s Governance and Audit Committee was required to report annually to Full Council on its work programme activities. In this respect, the report included the following areas:

·       The role and function of the Governance and Audit Committee;

·       Committee membership;

·       Meeting dates and summary of work undertaken;

·       Internal Audit;

·       External Audit;

·       Governance;

·       Treasury and Accounts;

·       Risk Management; and

·       Training and Development.

 

Members considered the report and stated that they were pleased with the content and flow of the document. No further comments were made.

 

Members voted that the report be recommended to Full Council.

 

AGREED:

 

That the Governance and Audit Annual Report 2023/2024 be noted and recommended to Council.

 

37.

Governance and Audit Committee Work Programme pdf icon PDF 114 KB

To set out the Work Programme of the Governance and Audit Committee (report of the Democratic Services Manager enclosed).

Additional documents:

Minutes:

Consideration was given to the report of the Democratic Services Manager which set out the Work Programme of the Governance and Audit Committee.

 

The Democratic Services Officer introduced the report and updated the Committee on the following points:

  • Appendix A had been updated with re-scheduled items;
  • Appendix B summarised the training record of the Committee:
    • Treasury Management training provided by Link had been confirmed for 22 October 2024 and was to be offered to the wider Council membership; and
    • The arrangement of Pensions Training awaited appointment of the Co-opted Independent Members.

 

Members considered the update and made the following comments:

 

  • Members requested sight of the written procedures for the Designated Member Budgets.

 

AGREED:

 

That the Work Programme of the Governance and Audit Committee be noted.

 

38.

Any other items which the Chairman decides are urgent.

 

 

NOTE:            No other business is permitted unless by reason of special circumstances, which shall be specified in the minutes, the Chairman is of the opinion that the item(s) should be considered as a matter of urgency.

Minutes:

Upon receipt of written consent from the Chairman of the Governance and Audit Committee, an urgent item (which encompassed items 12 and 13 of Agenda Supplement 2) was added to the agenda on 10 September 2024.

39.

Exclusion of Press and Public

Minutes:

Under section 100A (4) of the Local Government Act 1972, the press and public were excluded from the meeting for the following item of business on the grounds that it involved the likely disclosure of exempt information as defined in Paragraph 1 of Part 1 of Schedule 12A of the Act.

 

40.

Co-opted Independent Members

To receive recommendations from the Interview Panel which conducted interviews for Co-opted Independent Members on the Governance and Audit Committee (report of the Assistant Director – Governance (Monitoring Officer) enclosed).

 

(Please note that this item was not included on the agenda published on 4 September 2024. This is an urgent item added with the approval of the Chairman on 10 September 2024).

Additional documents:

Minutes:

Consideration was given to the report of the Assistant Director – Governance (Monitoring Officer) which asked the Governance and Audit Committee to receive recommendations from the Interview Panel which had conducted interviews for Co-opted Independent Members on the Governance and Audit Committee.

 

AGREED:

 

That the recommendation detailed within the exempt report be approved.